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Higher Filing Thresholds for Hart-Scott-Rodino Antitrust Improvements Act of 1976 Premerger Notifications Effective February 11, 2013

1. Higher Thresholds For HSR Filings

Higher thresholds for premerger filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 became effective on February 11, 2013. The filing thresholds are revised annually, based on the change in gross national product.

The HSR Act notification requirements apply to transactions that satisfy the specified "size of transaction" and "size of person" thresholds. The key adjusted thresholds are summarized in the following chart:

Size of Transaction Test Notification is required if the acquiring person will acquire and hold certain assets, voting securities, and/or interests in non-corporate entities valued at more than $70.9 million.

Size of Person Test

(Transactions valued atmore than $283.6 million are not subject to the Size of Person Test and are therefore reportable)

Generally one "person" to the transaction must have at least $141.8 million in total assets or annual net sales, and the other must have at least$14.2 million in total assets or annual net sales.

While the filing thresholds have changed, the filing fees have not, but will be based on the new thresholds as follows: $45,000 for transactions valued at more than $70.9 million but less than $141.8 million; $125,000 for transactions valued at more than $141.8 million but less than $709.1 million; and $280,000 for transactions valued at more than $709.1 million.

The above rules are general guidelines only and their application may vary depending on the particular transaction.

2. Higher Thresholds For the Prohibition Against Interlocking Directorates

Higher thresholds for the prohibition in Section 8 of the Clayton Act against interlocking directorates became effective on January 14, 2013. Section 8 prohibits, with certain exceptions, one person from serving as a director or officer of two competing corporations if two thresholds are met. Applying the new thresholds, competitor corporations are covered by Section 8 if each one has capital, surplus and undivided profits aggregating more than $28,883,000, with the exception that the interlock is not prohibited if the competitive sales of either corporation are less than $2,888,300. As with HSR thresholds, the FTC is required to revise Section 8 thresholds annually based on gross national product.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume III, Number 47
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